RELEASE: The True Costs of E-Verify

Washington, D.C.—E-Verify—the federal government’s Internet-based system that verifies work eligibility—is slated to become the epicenter of the legislative battles over immigration reform this summer. House Judiciary Committee Chairman Lamar Smith (R-TX) introduced the Legal Workforce Act of 2011, H.R. 2164, on June 14, 2011, which would make E-Verify mandatory for all workers in the United States. It is likely to see a vote in the House by the summer recess.

E-Verify is already in use by an estimated 4 percent of American employers, but expanding it for use by all U.S. businesses, from the mom-and-pop grocery store, to the biggest employers in the nation, presents onerous and expensive challenges. The inherent technical hurdles to scaling a system up from 4 percent to 100 percent of all employers include building the necessary infrastructure to process E-Verify requests and operating it without error.

This brief seeks to arm policymakers and the public with a better understanding of the true costs of E-Verify. It explains the system’s known costs, such as lost tax revenue and monetary burdens on small businesses, and estimates the cost of additional fiscal burdens— to individuals verified through the system, to employers utilizing the system, and to the federal government in running the system—that have been absent from much of the dialogue surrounding it.

In particular, we focus on the added costs that do not get scored in government revenue estimates, such as the high legal costs to employers to defend their use of the program, the “jobs tax” that will be needlessly applied to American workers, and the increased burdens on federal agencies from new mandates. All of these numbers add up to one simple conclusion: Mandating E-Verify without legalizing all workers is too expensive, especially in these fragile economic times.

Among the costs of making E-Verify mandatory for all workers:

• 770,000 legally authorized Americans would lose their jobs because of errors in the system.

• Another 1.2 million to 3.5 million Americans would have to visit a Social Security Administration office to fix erroneous information to avoid losing their jobs. CAP estimates this will cost $190 in lost wages and transportation per person—a jobs tax on ordinary Americans.

• Naturalized citizens are 30 times more likely than the native born to receive an error from E-Verify.